Life Insurance License Exam Flashcards

A passing score of 70% is typically required.

Many states mandate completion of pre-licensing coursework hours before you can sit for the exam.

A financial or emotional stake in the continued life of the insured, causing genuine loss if that person dies. It must exist at the time the policy is issued.

Term covers a set period with no cash value and lower premiums; Whole Life is permanent, builds cash value, and has level premiums for life.

Permanent insurance with flexible premiums and an adjustable death benefit, where cash value earns interest and policy costs are deducted from it.

The primary beneficiary receives the death benefit first; the contingent (secondary) beneficiary receives it only if the primary dies before the insured.

A period after policy delivery during which the owner may return the policy for a full premium refund, no questions asked.

The insurer's process of evaluating an applicant's risk to decide whether to issue coverage and at what premium rating.

The grace period allows a late premium payment while coverage stays active; if the premium is still unpaid after it, the policy lapses and coverage ends.

Guaranteed uses of accumulated cash value when a policy is surrendered: cash surrender value, reduced paid-up insurance, or extended term insurance.

An optional add-on that modifies coverage — e.g., waiver of premium, accidental death benefit, or guaranteed insurability.

An agent represents the insurer and binds coverage on its behalf; a broker represents the applicant/insured shopping among insurers.

Death benefits paid to a named beneficiary are generally received income-tax-free as a lump sum.

Indemnity restores an insured to their pre-loss financial position. Life insurance is generally a valued contract (pays a stated face amount) rather than a pure indemnity contract.